VFF Chair explains why Samsung has invested in Vietnam

 For that reason, as well as lower labor costs, they have invested in the country, Vietnam Fatherland Front (VFF) Chair Nguyen Thien Nhan has told the National Assembly.

During the 10-minute presentation about economic restructuring, he emphasized that the quality of the human resources is one of the most important factors of the restructure.

“In 1996, we had 35 million workers. In 2016, we have 54 million. This means that the number of workers has increased by 19 million after 20 years,” Nhan said.

“It is expected that we will have 68 million workers by 2035. This is a very valuable asset and a big advantage for Vietnam,” he said.

According to Nhan, many developed countries now suffer from a lack of workers due to low birth rates. In developed countries such as South Korea, Singapore and Japan, the number of births per family is 1.25, 1.26 and 1.4, respectively.

“As such, we will still have an advantage in the labor force for 30 more years,” Nhan said, adding that Vietnamese workers are industrious, creative and have rapidly improving skills. 

Moreover, the labor cost in Vietnam is lower than many other regional countries.

Citing statistics, Nhan said that a manufacturing worker in Japan is paid 29 times more than a Vietnamese for one working hour, while a Singaporean in the field is paid 20 times higher, a Korean 17 times and a worker in Taiwan eight times.

“Samsung has high technology and abundant capital. It only lacks workers. And that is why it invests in Vietnam,” Nhan said.

In the last 20 years of investment in Vietnam, Samsung Electronics, together with satellite companies, have invested nearly US$10 billion to build large-scale production complexes in Bac Ninh, Thai Nguyen and Ho Chi Minh City.

According to the Ministry of Planning and Investment, Samsung’s total investment capital in Vietnam may reach US$20 billion by 2017.

Making big investments, the electronics conglomerate can make big profits. Samsung Electronics Vietnam (SEV) and Samsung Electronics Vietnam Thai Nguyen (SEVT) alone had turnover of US$33.4 billion in 2015 and US$3.1 billion in post tax profit in 2015. 

The profit was equal to the total profit earned by Vietnam’s two largest conglomerates – Viettel and PVN.

Samsung could gain success partially because it could save big money on labor costs.

“Therefore, using the labor force effectively and developing human resources is always the top priority task for economic restructuring,” Nhan said.